RICHMOND, Va. -- According to a British Medical Journal study last year, nearly 50% of black market cigarettes missing New York tax stamps came from Virginia. The reason is hardly a mystery: New York boasts the highest cigarette excise tax in the country ($4.35 per pack) versus Virginia’s 30-cents-per-pack rate (the second lowest in the nation). Separated by just a few hours via car, smuggling cigarettes from Virginia and into New York and other higher-tax states has become quite a lucrative business.
“It’s like a train track,” Paul Carey, head of enforcement for the Northern Virginia Cigarette Tax Board, told the Richmond-Times Dispatch. “You can pluck off trains all day long, but that track is still there.”
Though some would argue black-market cigarettes are New York’s issue, Ken Mosley of the Bureau of Alcohol, Tobacco, Firearms and Explosives office in Richmond said the criminals that illicit trade attracts are becoming a problem Virginia needs to address.
“It’s an immense problem here … a huge organized crime problem in this state,” Mosley said.
Once limited to smaller mom-and-pop players buying just a few cartons at a time, law enforcement officials told the Richmond-Times that the low excise tax is now drawing in new players who move Virginia and take advantage of holes in the state’s laws to buy significantly larger quantities of cigarettes to smuggle into New York. These organizations often buy or open small tobacco, grocery or convenience stores to use as fronts for the trafficking rings—and at times engage in other, more serious illicit trade of firearms, jewelry, automobiles and hard drugs.
Mosley said these groups are increasingly leading to violence within the state: four men were charged in a recent Richmond case in connection with carjackings and robberies of cigarette wholesalers, and the Richmond-Times cited at least one Richmond-area murder that could be tied to cigarette trafficking.
“The cigarette is replacing narcotics trafficking as a source of income,” said New York City Sheriff Joseph Fucito. “It’s much easier to move cigarettes from Virginia (which only becomes illegal when they reach New York) instead of something illegal such as drugs. It’s less of a risk.”
Asked why Virginia should be concerned, Fucito—whose department conducts tobacco retail inspections—pointed to the organized crime aspect.
“The level of violence, as you’re beginning to see, will increase because of competition,” he continued. “Who will control this flow of material to New York, who’s selling it to people in New York?”
Mosley added that in Virginia, “the violence is increasing.”
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